The major U.S. stock indices closed mixed, but the selling in technology shares was the dominant story. The Nasdaq Composite fell 2.60%, while the Nasdaq 100 lost 2.90%. The S&P 500 also declined sharply. The Dow and Russell 2000 managed small gains, but neither offered much cushion.Market breadth was negative. On the Nasdaq, 1,734 stocks declined versus 1,471 advancing. So although the largest losses were concentrated in technology, the weakness extended beyond a handful of heavily weighted names.Investors continued to question whether earnings and guidance could justify expectations surrounding AI spending. Higher oil prices amid Middle East tensions added another concern. Falling Treasury yields offered little relief to technology shares during the session.The closing numbersDow Industrial Average: Up 11.98 points, or 0.02%, at 52,873.28.S&P 500: Down 93.74 points, or 1.21%, at 7,663.43.Nasdaq Composite: Down 694.00 points, or 2.60%, at 26,008.86.Russell 2000: Up 3.01 points, or 0.11%, at 2,784.03.Nasdaq 100: Down 863.83 points, or 2.90%, at 28,958.69.Chip and AI shares take the biggest hitsYesterday’s recovery did not provide much protection for buyers today. Semiconductor equipment, chips and AI infrastructure shares were hit particularly hard, with many falling considerably more than the broader Nasdaq indices.Among the notable technology decliners:Lam Research: Down 11.75% to $230.16.Lumentum: Down 11.54% to $752.54.Astera Labs: Down 11.17% to $257.65.Teradyne: Down 10.63% to $308.75.CoreWeave: Down 10.06% to $55.60.KLA: Down 9.55% to $147.83.Marvell: Down 8.68% to $223.52.SanDisk: Down 8.51% to $1,260.93.Applied Materials: Down 8.16% to $375.58.AMD: Down 8.10% to $507.93.Intel: Down 8.04% to $85.49.Lam Research highlighted how unforgiving the market has become. Record quarterly revenue and a revenue beat were not enough to offset disappointment with its forward earnings outlook. Traders were focused on what comes next.Outside technology, Moderna fell 17.57% to $202.63, while SpaceX declined 9.13% to $144.77.S&P 500: Buyers have repair work to doUsing the levels outlined in my earlier technical analysis, the S&P closed below its 200-hour moving average near 7,714 and its 100-hour moving average near 7,754. Those levels now become upside hurdles. Getting above and staying above them would help buyers take back some control.Below, the rising 100-day moving average near 7,603 sits within the swing area between 7,573 and 7,617. That remains the next important support zone. Today’s close stayed above it, but a sustained break below would increase the bearish bias.Nasdaq Composite: Below the 100-day moving averageThe Nasdaq Composite closed below its 100-day moving average at 26,265.87, identified earlier today. That puts the burden on the buyers.A recovery above that moving average—and the ability to stay above it—would ease some immediate pressure. Until then, sellers remain in control, with the September low at 25,831.74 the next downside target. Below that, attention would turn toward the 38.2% retracement at 25,036.33 and the rising 200-day moving average near 24,980.37.The lesson for tradersA small gain in the Dow does not tell the whole market story. Breadth measures how many stocks participate, while index performance also reflects their weightings.Today, negative breadth and sharp losses across chip and AI shares showed why traders need to look beneath the headline. For buyers, a cheaper price is only the starting point. Getting back above a broken technical level—and staying above it—is what begins to improve the trading picture.Related analysisUS futures tumble as AI rally faces fresh scrutiny despite solid Meta earnings This article was written by Greg Michalowski at investinglive.com.